'This Week' Transcript: Gen. Jim Jones (Ret.)

AMANPOUR: This week -- furious mobs kill more western civilians
in Afghanistan. And as the death toll mounts, the Florida pastor who
started it by burning a Koran says that he has no regrets.

(BEGIN VIDEO CLIP)

TERRY JONES: We do not feel responsible, no.

(END VIDEO CLIP)

AMANPOUR: Our correspondent is with American soldiers in the
deadliest firefight against the Taliban in months.

Then in Libya, despite U.S. and NATO bombing runs meant to save
them, rebels are in retreat from Gadhafi's forces. Is America in a
battle it can't win? Three wars and billions of dollars later, we'll
discuss all of this with the president's former national security
adviser in his first interview since leaving the White House.

Also, who will pay for it all?

The jobs picture is getting brighter. But could rising prices,
revolution, and a nuclear disaster kill the recovery? And as partisan
bickering meets the bloated budget, will the government shut down
later this week?

(BEGIN VIDEO CLIP)

REP. MIKE PENCE R-IND.: I say, shut it down.

(END VIDEO CLIP)

AMANPOUR: Two top senators join us for a This Week debate.

ANNOUNCER: Live from the Newseum in Washington, This Week starts
right now.

AMANPOUR: Welcome to the program. Right now, the Middle East is
falling further into chaos, violence and uncertainty as the United
States grapples with fresh challenges in two of its three wars.
President Obama, who ran as the anti-war candidate, now finds himself
struggling to defend new American military action overseas, while the
rapidly changing situations in Libya, Afghanistan, and across the
Middle East pose new threats to U.S. security and credibility.

I'll be talking to my colleagues Mike Boettcher and Nick Schifrin
in Afghanistan, and Jeffrey Kaufman and Alex Marquardt on the front
lines in Libya.

Let's turn first to Afghanistan, where a firefight along the
Pakistan border brought one of the deadliest days for American troops
in months, and where the battle for hearts and minds may have been
virtually erased overnight at the hands of a fringe pastor in Florida.

After months of threatening to burn a copy of the Koran, Pastor
Terry Jones and his handful of followers finally did just that. This
deliberately provocative act received little media attention here in
the United States, but it did spread like wildfire online. And within
days, protests in Afghanistan turned deadly.

ABC's Mike Boettcher is embedded with the 101st Airborne
Division. Mike was the lone reporter on that bloody six-day offensive
along the border.

Mike, how bad was that?

MIKE BOETTCHER, ABC CORRESPONDENT: In 30 years of covering war,
I have never seen such withering fire. And soldiers who have been
deployed four or five times will tell you the same thing.

A high price was paid. Six U.S. soldiers were killed. Six were
wounded. Two Afghan national army were killed. And seven Afghans
were wounded in this battle, and the battle continues as we speak,
right now.

This is a significant engagement because it marks a turning point
or a change in strategy along the Pakistan border where bases have
been closed in recent months, small combat outposts. The U.S. now
says that they're taking a more mobile strategy, going to areas they
haven't been before, and going after the Taliban. They're going to
carry this through, through the spring and summer and expect to see
very heavy fighting in the east part of the country in the coming
year. Christiane?

AMANPOUR: Meantime, in cities across Afghanistan today, more
scenes of rage and violence in response to that Florida pastor's
decision to burn a Koran. The situation does present a grave new
problem for the United States. And ABC's Nick Schifrin joins me now
from Kabul.

Nick, today, General Petraeus had to come out and specifically
condemn the burning of that Koran. How bad is it there?

NICK SCHIFRIN, ABC CORRESPONDENT: Well, we've seen three
protests three days in a row now, massive protests, 8,000 miles away
from that Koran-burning. Today thousands of Afghans in the streets of
southern Afghanistan and eastern Afghanistan, they were burning U.S.
flags and chanting "death to President Obama."

Now David Petraeus came out with that statement today, but there
is one good piece of news. The Afghan police did not shoot into the
crowds like they did yesterday. On Friday, they were supposed to be
the first line of defense around a U.N. building where seven U.N.
workers were killed. They were not able to keep those workers -- keep
those protesters out of that U.N. building.

And U.S. officials are deeply concerned about that, because the
place where that happened, Mazar-i-Sharif, is the first city that is
supposed to transfer to Afghan control, to transfer to Afghan police
control in three months.

And U.S. and U.N. officials are worried that this incident is a
sign that the police aren't ready to take control -- Christiane.
AMANPOUR: Nick, thank you. And obviously we'll keep monitoring
that situation.

And now we turn to Libya. America's newest war is entering its
third week of bombing, and still there is no sign that Colonel Gadhafi
is stepping down. And now more bad news for the makeshift rebel
forces. NATO warplanes seem to have mistakenly bombed one of their
convoys. Another blow in a week where they've seen most of their
gains against Gadhafi wiped out.

Just Monday, the rebels were within striking distance of
capturing Gadhafi's home town of Sirt. And they had the capital
Tripoli in their sites. But by week's end, they were beating a hasty
retreat with Gadhafi forces once again in control of the long stretch
of coastline.

Our reporters in Libya have been tracking all of this. Jeffrey
Kaufman just arrived in Tripoli, and Alex Marquardt joins us from the
rebel bastion of Benghazi. Let's start with Jeffrey.

Jeffrey, in Tripoli, any signs of the tension or that maybe
Gadhafi is on his last few days?

As we came in, we saw a lot of military checkpoints, long lines
for gasoline, a lot of shops closed. But the tension is not palpable
at this point. The rebels are clearly on the retreat. Really, what
we're seeing now in Libya is a divided country, almost two countries:
the rebel-held east and the Gadhafi-held west.

And neither one seems to have the strength right now to unseat
the other. Certainly the rebels aren't organized enough, manned
enough, or skilled enough to come to Tripoli. And Gadhafi, it seems,
the coalition will not let him go further east and retake those
valuable oil fields in those areas.

So right now the word to describe this revolution, weeks into it,
is stalemate -- Christiane.

AMANPOUR: Jeffrey, thank you. You mentioned stalemate and also
divided country. And joining me now from the rebel-held city of
Benghazi is ABC's Alex Marquardt.

Alex, how are these rebels dealing with being unable to really
capitalize on all of the help the no-fly zone is giving them?

ALEX MARQUARDT, ABC CORRESPONDENT: Christiane, they're not able
to capitalize because they are outmanned, they are outgunned, and they
are not able to organize. They don't have the weapons to face
Gadhafi's superior firepower. So they're forced to beat a retreat.

They don't have any sort of leadership. So when they retreat,
they do so in a disorganized fashion, very quickly, no one showing
them how to hold the line, how to retreat.

So we're seeing now glimmers of hope that they'll be able to
organize. Experienced officers on the frontlines trying to corral
these groups into units, keeping people back without any sort of
training.

And for the first time on the frontlines on Friday we saw the
general who is technically in charge of these forces, General Abdel
Fattah Yunis, welcomed with a hero's welcome. So signs that there is
some leadership coming to the frontlines that is so desperately needed
by these rebels.

AMANPOUR: Alex, thank you so much.

Rarely has a president faced a foreign policy puzzle this
complex. President Obama, of course, came into office pledging to
repair America's relationship with the Muslim world. Now that
relationship is tested like never before. Joining me to discuss the
path forward, the president's former national security adviser,
General Jim Jones. He's now a senior fellow at the Bipartisan Policy
Center.

Thank you for joining us.

JONES: Thank you, Christiane. Good to be here.

AMANPOUR: Let's first talk about Afghanistan, since that seems
to be a real crisis again at the moment. This pastor who burned the
Koran, is unrepentant. Do you think despite the freedoms envisioned
and expressed specifically in the American Constitution, he should not
have burned that Koran?

JONES: Oh, I don't think he should have done that at all. I
think it's extremely irresponsible, and look at what it has led to.

AMANPOUR: You also heard Mike Boettcher's report, a fierce
firefight along the Pakistani border, one of the worst that the
Americans had been involved in. Right now, do you think the United
States forces can pull down significantly in July?

JONES: Well, I think that there can be and there will be some
reduction of force in keeping with the agreement made at Portugal at
the NATO summit in December to target 2014 as, in President Karzai's
own words at the London Conference, "This is when I want to be able to
control my entire country."

AMANPOUR: But can it be done responsibly, if you'd like?

JONES: Yes, I think so. I think it can be done responsibly.
And we'll have to see what it looks like. A lot of it hinges on what
happens on the other side of the border with our friends, the -- our
neighbors the Pakistanis.

If Pakistan turns to what some of us think they should have done
more effectively for a long period of time now, attacking and removing
those safe havens that cause us so much difficulties, and if we can
get some sort of coordination with their forces, then I think you can
in fact...

(CROSSTALK)

AMANPOUR: You say if. You don't seem convinced that they're
playing their part.

JONES: Well, I don't -- I'm not convinced. I think there was
some good progress made in the Swat Valley and in North Waziristan a
year or so ago. But it hasn't been sustained. There still seems to
be that reluctance to engage comprehensively and buy into an overall
plan that would, I think, really help Pakistan in the long term.

AMANPOUR: All right. General Jones, stay with us because up
next we will talk about Libya. Will Libya become Obama's Iraq, as
some are now suggesting? And it's a question you'll hear more and
more in the coming days. I will ask General Jones if he sees an end
in sight.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ROBERT GATES, DEFENSE SECRETARY: There will be no American boots
on the ground in Libya. Deposing the Gadhafi regime, as welcome as
that eventuality would be, is not part of the military mission.

(END VIDEO CLIP)

AMANPOUR: Defense Secretary Robert Gates testifying on Capitol
Hill Thursday. He is on the record saying that stopping the violence
in Libya is not a vital national interest of the United States. But
America is in the game now. And the big questions, for how long? And
to what end? Let's bring back retired General Jim Jones, who was
President Obama's first national security adviser.

Welcome back again. On Libya, Secretary Gates has said on this
program and on several last week, that it was not in the vital
interest of the United States. Do you agree?

JONES: I agree with that.

AMANPOUR: You agree that it's not in the vital interest?

JONES: I agree that it's not a vital interest in the sense that
it affects the security -- the vital security of the nation. But we
are part of an alliance. We are one of the global leaders, if not the
global leader. And we have to do -- it is in the vital interest --
more in the vital interest of Europeans, when you consider the effects
of massive immigration, the effects of terror, the effects of the oil
market.

AMANPOUR: So the United States is now in it. You can call it
what you want. But it's a third armed conflict.

JONES: We're a part of it. We are transitioning to a supporting
part, only the United States could have gotten there as quickly as it
did.

AMANPOUR: The United States is making a great fanfare about now
giving over to NATO. But you were a former SACEUR, a former NATO
commander. NATO, to all intents and purposes, is an American
organization. It's run by an American commander. The chain of
command is American. The biggest command and control and resources
are American. This is still an American-led operation, right?

JONES: I'm not sure I completely agree with that. We have, you
know, in the sorties that are being flown now, as I understand it,
it's roughly 50-50. And it's going to go down to where the Americans
are going to be supporting and reconnaissance, search and rescue,
intelligence, refueling, things like that.

There are 40-some-odd ships off the coast, only 10 are American.
There are 40 flag officers from different countries involved, only 10
of which are American. So it really is a -- I think it's encouraging
to see allies stepping up at a level that we haven't seen before. I
mean, it has been good.

AMANPOUR: What is the endgame? I mean, really, what is the
endgame? We've seen two weeks of bombing. Gadhafi is where he is.
Yes, there have been some high profile defections. The president has
said Gadhafi has to go.

JONES: And this is the next piece that's the difficult piece.
Because...

AMANPOUR: But what is -- how does one accomplish that?

JONES: The strategic question is, what do you do when Gadhafi
goes? Because we don't know exactly who the opposition is, yet.

AMANPOUR: But before that, how do you get Gadhafi to go?

JONES: Well, that's the part that is being working on. And I
think...

AMANPOUR: Do you know?

JONES: I don't know. I don't know. I don't know the answer to
that. But I do know that that is the wish and the goal of this entire
effort.

AMANPOUR: You mentioned, who are these rebels? It's a question
everybody wants to know.

JONES: Opposition.

AMANPOUR: Opposition rebels...

JONES: You can call them whatever you want.

AMANPOUR: Whoever they are, freedom fighters. But the world has
now taken their side. Who are they? Do you know?
JONES: Well, I don't -- I personally do not know. And I know
that there is tremendous effort going on in many capitals around the
world to make sure that we do understand what that is.

AMANPOUR: When you see these rebels, as Alex Marquardt said and
we've been reporting, unable to capitalize on the no-fly zone, what
has to be done to help them? Should they be armed? Should they be
trained?

JONES: Well, I think the first thing that has to be done is to
find out who these -- who they are. And so if you start from the
proposition that our reason for committing our forces, as Americans or
as part of NATO, was basically to avoid a massacre of innocent
civilians, which probably would have happened, and now we're there,
and now we have to do -- now we have to take the rest -- follow the
rest of the trail to identify these people, then decide, you know,
whether that's meritorious or not in terms of training, organizing,
equipping.

The United States has not done that yet.

AMANPOUR: Isn't it troubling that we don't know who they are and
what their goals and aspirations are?

JONES: Well, it's a pop-up mission that came very quickly. It
metastasized to the point where 700,000 people were going to be
threatened. And, you know, I wish -- in all of these things, we
always want it to be clear, we want nice end-state rules. But the fog
of war doesn't sometimes allow for that.

And so now we are putting this together, I think, from what I can
see, we're doing the things that have to be done before we decide --
before the coalition decides, the U.N. decides exactly what to do
next.

AMANPOUR: Let's just quickly turn to Yemen, a major American
ally. If Saleh falls, how bad is that for the fight against al Qaeda
-- if the president of Yemen falls?

JONES: Well, I think that's -- I think Yemen is very worrisome.
This is a -- Saleh has been very skillful over the years in being able
to consolidate and maintain his power. The trends in Yemen are not
good. And this could be a major problem. And where terror is
concerned, this would be a safe haven that would be a very troubling
turn of events for us.

AMANPOUR: So is the U.S. to try to keep Saleh in power or what?

JONES: Well, I don't know -- you know, there are certain things
that we can do and that we can't do. When events reach a certain
stage, they have a life of their own. And it would be nice to be able
to think that we could do everything and make the world, you know,
perfect the way we want it. But that's not the case.

So the trendlines in Yemen are not good. We've invested a lot of
work in Yemen. But it is a disturbing trend for the future. And this
is -- again, one of the things that I feel strongly about is that when
you look at what's going on in this part of the world and you look at
the potential, there is reason to be optimistic in some areas and
there is reason to be very concerned in others.

But it's a tremendous tectonic shift in terms of the world as we
know it, and this part of the world since -- for the last 80 years.

AMANPOUR: General Jones, thank you very much, indeed, for
joining us.

And what do you think the U.S. should do next in Libya? Tweet
me, @camanpour #libyanext.

Meantime, the costs of the new war are already piling up. More
than half a billion dollars so far. All this as Congress and the
White House remain at loggerheads over a federal budget, and a
government shutdown is looming.

The deadline just five days off. Will lawmakers beat the clock?
We'll hear from one of the Democrats' toughest negotiators, Senator
Chuck Schumer, and the top Republican on the Budget Committee, Jeff
Sessions. That's in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, (R) OHIO: I have never believed that shutting
the government down was the goal. And frankly, let's all be honest,
if you shut the government down, it will end up costing more than you
save because you interrupt contracts -- there are a lot of problems
with the idea of shutting the government down. It is not the goal.

(END VIDEO CLIP)

AMANPOUR: House Speaker John Boehner, the man in the middle this
weekend, caught between a rowdy freshman class of hardline
conservatives and the more moderate congressional Republicans who want
to deal.

Boehner, of course, wants a deal, too. But as senior political
correspondent Jon Karl tells us, it's hard to broker compromise in a
town where compromise itself has become a dirty word.

(BEGIN VIDEOTAPE)

CROWD: We want it back. We want it back.

JON KARL, ABC NEWS CORRESPONDENT: Compromise on spending cuts?
Not if these folks have anything to say about it.

UNIDENTIFIED MALE; It's time to pick a fight.

UNIDENTIFIED MALE: Because if we don't, we deserve to be thrown
out of office.

REP MIKE PENCE, (R) INDIANA: Liberals in the Senate would rather
play political games and shut down the government instead of making a
small down payment on fiscal discipline and reform. I say, shut it
down.

(CHEERS)

KARL: That was at a Tea Party rally on Capitol Hill where one
organizer had this message for GOP leaders.

KATHY DIRR, TEA PARTY PATRIOT: I say to the Republican
leadership, take off your lace panties. Stop being noodle-backs.
KARL: The attitude runs deep among House Republicans, some of
whom don't want to compromise on spending cuts, or issues like funding
for Planned Parenthood. Democrats have already agreed to make more
than $30 billion in cuts over the next six months, perhaps the largest
cut Congress has ever made.

But Speaker of the House John Boehner's biggest challenge may be
to convince his rank and file to accept victory.

BOEHNER: We control one half of one third of the government here
in Washington. We can't impose our will on another body. We can't
impose our will on the Senate. All we can do is fight for all of the
spending cuts we can get an agreement to.

KARL: Democrats have their hot heads, too. One Obama
administration official said the Republican bill, which cuts $5
billion from the agency for International Development would kill kids.
That's right. Kill kids.

RAJIV SHAH, USAID ADMINISTRATOR: We estimate, and I believe
these are conservative. That HR 1 would lead to 70,000 kids dying.

KARL: For weeks, Democrats have been accusing Republicans of
putting the country at risk of a government shutdown. Enter Howard
Dean.

HOWARD DEAN, FRM. DNC CHAIRMAN: Yeah!

KARL: Former Democratic Party chairman who told a forum this
week that it is Democrats who should quietly rooting for a shutdown so
they can blame it all on Republicans.

DEAN: From a partisan point of view, I think it would be the
best thing in the world to have a shutdown.

KARL: And even the Democratic leaders trying to negotiate the
deal seem to have one word describe their Republican colleagues.

UNIDENTIFIED MALE: Extreme level far to the right.

UNIDENTIFIED MALE; Extreme Tea Party.

UNIDENTIFIED MALE: Extreme territory beyond what was reasonable.

UNIDENTIFIED MALE: Small, extreme minority.

KARL: Compromise with extremists out to kill kids? They have
less than a week to make it happen.

For This Week I'm Jonathan Karl.

(END VIDEOTAPE)

AMANPOUR: And joining me now, the Senate's third ranking
Democrat, who you just saw there, Chuck Schumer, who joins us from his
home state of New York, at our bureau there this morning. And with me
here in the Newseum, Senator Jeff Sessions of Alabama, the ranking
Republican on the budget committee.

Senators thank you very much for joining me.

Well, you saw Jon Karl's piece. And there's, you know, a lot of
hijinks in that piece.

Let's get to the bottom of what's going on, Senator Sessions, has
any progress been made this weekend amongst negotiators?

SESSIONS: I don't know that it has.

AMANPOUR: Is that a no?

SESSIONS: Well, I don't know that it has.

Mr. Boehner, the speaker, has indicated that he has not reached
an agreement. So has Mitch McConnell, the Republican leader. So I
think that negotiations continue and they need to continue.

But what this is -- Christiane, we really need to understand this
is more than a Republican-Democratic squabble. This is -- the
fundamental question is, are we headed to a financial crisis if we
don't get off the fiscal course we're on? We have had witness after
witness say that is so, Erskine Bowles said that President Obama's
choice to head the debt commission, we're facing the most predictable
debt crisis in American history. It could happen within two years.

We have got to take action now.

AMANPOUR: And we'll get to that.

Senator Schumer, from your perspective, has any progress been
made? Will there be a shutdown in five days?

SCHUMER: Yes. No I don't -- excuse me. I don't think there
will be a shutdown, Christiane. In fact, I'm quite optimistic. I
think progress is being made. They're working off a number, $33
billion in cuts. That's very reasonable. It's right in between what
Democrats have proposed and Republicans have proposed right in the
middle. And after all, that was the number proposed originally by the
House Republican leaders, Ryan and Rogers, the head of the
appropriations committee.

So they're working off that number. That's good. Now we have to
figure out what goes into that number. And that's where the
discussions are headed.

Let me just say a word about that. We have two goals here. Jeff
is right, we have to deal with the deficit very seriously. But we
also have to deal with the economy and job growth. And we don't want
to snuff that out. And particularly when we're beginning to see jobs
grow.

If you just cut from domestic discretionary, you'll have to cut
things like helping students go to college, you'll have to cut
scientific research, including cancer research. These things have
created millions of jobs through the years.

And so the good news is this: There's another place we can look
to cut not just on domestic discretionary. It's called mandatory
spending. It requires you to do something for somebody, but the way
of doing it is not required. We can find cuts in places like
agriculture and justice and banking. These are now being called
CHIMPS...

AMANPOUR: CHIMPS?

SCHUMER: CHIMPS, yes, changes in mandatory program spending.

And we've offered about $10 billion of those to our Republican
colleagues. They're not adverse to them, because HR 1 had some of
those in. And I believe that's how we can come to an agreement that
both keeps job growth and cuts the deficit at about the $33 billion
level. And I believe that's where we'll end up.

AMANPOUR: You've raised a number of issues there. Let me first
quickly ask Senator Sessions, do you -- we're talking about the job
numbers, do you think that's -- that's good news, obviously. The job
numbers have increased. The unemployment number has come down, lowest
in two years.

SESSIONS: Well, it's really high.

AMANPOUR: It is, but it's come down. That's good.

SESSIONS: Not much.

This was a good month. This was a good month of a little over
200,000. We need to average 250,000 jobs a month. In the last three
months we have only averaged 124,000 new jobs. We are well below
where we need to be.

One of the reasons, as the testimony of Secretary Geithner,
President Obama's Secretary of Treasury, testified that the debt is
pulling down our growth and creates a threat of a crisis that could
put us back into recession. We have got to make changes now.

AMANPOUR: Can you live with the short-term method here. Can you
live with the $33 billion in cuts?

SESSIONS: I really believe we should do 61 total as the House
proposed over ten years. That would be a savings of $860 billion.

We have to borrow this money. The House has sent a bill over
that reduces what is before us, discretionary spending, CR, is the
only thing before us. They proposed 61. The Democrats started at 4
or 5. They've how to been pushed up to halfway. I think we should go
all the way.

But we'll have to let our leaders work on this and see,
hopefully, an agreement that goes as far as possible.

AMANPOUR: As this haggling continues, I'm going to ask you,
Senator Sessions. Speaker Boehner this week basically said, and I
think it's sarcasm, thank you guys for painting me into a box that's
just where I want to be, talking about the conservative -- the Tea
Partiers. Have they held the Republican leadership sort of hostage in
these negotiations.

SESSIONS: Christiane, that's the Democratic spin. That's the
way...

AMANPOUR: But this is what Speaker Boehner said.

SESSIONS: I know that. But I'm telling you what the real deal
is. This week, the House -- Republican House will submit a mature,
serious budget for long-term reform of spending in America that will
avoid a debt crisis this country is facing in two years, according to
Mr. Erskine Bowles.

The Democrats have no plan except the president's plan which
makes the debt worse than the current trajectory we're on. It raises
taxes. It increases spending even more. It doubles the debt. We'll
take interest from $200 billion last year in one year to $900 billion
in 10 years, crowding out all kind of social programs and beneficial
programs that Senator Schumer has talked about.

AMANPOUR: Right. Senator Schumer...

SCHUMER: Well, let me say this, Christiane. Yes, I have a lot
of sympathy for Speaker Boehner because he does want to come to an
agreement. He knows how devastating a shutdown would be. That's his
words, not ours. Although we all agree on that.

The one group that's standing in the way here is the tea party.
Now they have said that a shutdown is a good thing. You saw it on
that tape. Some of their leaders have said it over and over again.
Sarah Palin, Mike Pence, Michelle Bachmann. They say it's our way or
no way.

Well, that's not how the American government works. And I would
say this though, here's the good news. The American people are seeing
the tea party for what it is, extreme. And their popularity is
declining.

They now have only 33 percent of people in support of them, and
47 percent people against them. And when they lose clout, it makes an
agreement much more likely. It's another reason I'm optimistic.

AMANPOUR: All right. Let me just ask you this before we turn to
you, Senator Sessions. Today -- or rather, this week, you sort of
stepped in it, sort of recording-wise. You were caught briefing your
fellow senators on how to address this issue, didn't know apparently
the reporters were still on the conference call. Let's just play
that, because it plays right into the spin and the language about what
is going on right now.

(BEGIN AUDIO CLIP)

SCHUMER: I always use the word "extreme." That's what the caucus
instructed me to do the other week. Extreme cuts and all these
riders. And Boehner is in a box. But if he supports the tea party,
there's going to inevitably be a shutdown.

(END AUDIO CLIP)

SCHUMER: Now, you know, Christiane, I have no problem with
reporters hearing that. I said it a few hours before on the floor of
the Senate. I've said on it this show. The tea party is the group
standing in the way. They are extreme.

Any group that says you don't cut oil subsidies to companies
making billions and billions of dollars, subsidies that were passed
when the price of oil was $17 to encourage production, and now the
price is over $100, and at the same time, says, cut student aid to
help qualified students go to college, yes, I believe they're extreme.
And I have no problem with that...

(CROSSTALK)

AMANPOUR: OK, Senator Sessions, extreme and holding the party
hostage.

SESSIONS: It's absolutely false. Millions of Americans
participated in the tea parties. Tens of millions of Americans
support and believe what they're saying. And they are right
fundamentally. Maybe they don't understand all the realities of
Washington politics.

AMANPOUR: But are they right for being...

SESSIONS: But fundamentally they know this country is on a path
to fiscal disaster. As Erskine Bowles said, as Secretary Geithner has
said, as Alan Greenspan has said, we're heading -- and this Democratic
leadership proposes nothing.

AMANPOUR: Do you believe...

SESSIONS: But to attack the people who are trying to get this
country on the right course.

AMANPOUR: Do you believe there will be a shutdown?

SESSIONS: I hope not.

AMANPOUR: But do you think there will be?

SESSIONS: I doubt it. I doubt there will be a shutdown.

AMANPOUR: All right. Well, both of you agree on that. And, of
course, we do have to talk at another time about these huge mega-
issues, which really right now is tinkering around the edges, isn't
it? The big, big entitlement programs.

SESSIONS: We're talking about trillions of dollars.

AMANPOUR: Precisely. And we'll have you back...
SESSIONS: And the president has no plan whatsoever to deal with
it.

AMANPOUR: There seems to be no plan in general.

SCHUMER: That's not true at all.

AMANPOUR: And we'll discuss that the next time.

SCHUMER: That's not true at all.

AMANPOUR: Thank you very much, indeed, for being on this
program.

And tell us your thoughts on the war on Capitol Hill. Tweet me
@camanpour #budgetbattle.

And up next, new job numbers are moving in the right direction,
as we have heard, but could a government shutdown deal a serious blow
to the recovery? We'll get answers from our roundtable.

(COMMERCIAL BREAK)

AMANPOUR: A Florida pastor's reckless stunt sends shock waves
across Afghanistan, bringing mayhem and death. But today, Terry Jones
is unrepentant. How does the White House contain the damage caused by
a preacher gone rogue? Our "Roundtable" tackles that one. Stay
tuned.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Today, we learned that we added 230,000 private sector
jobs last month. And that's good news. That means more packages,
right?

(END VIDEO CLIP)

AMANPOUR: The president at a UPS facility on Friday. And yes,
the jobs picture is looking up. Unemployment is the lowest it has
been since March of 2009, just after President Obama took office. So
it's good news, if 8.8 percent unemployment can be considered good
news. But as the recovery picks up steam, the budget showdown in
Washington threatens to derail the progress that has been made.

Here to make sense of it all, our "Roundtable" with George Will;
Paul Krugman, Nobel Prize-winning New York Times columnist; Torie
Clarke, the former Pentagon spokeswoman in the Bush administration;
and David Ignatius of The Washington Post.

Great to see you all here. So, the jobs numbers, good, right?

(CROSSTALK)

PAUL KRUGMAN, THE NEW YORK TIMES: Yes, it begins with a sigh,
because, look, this is better than naught. Right? Better than no
jobs. But unemployment is a funny number. Unemployment, you're only
considered unemployed if you're actively looking for work. And so if
you look, over the past year, the unemployment rates have come down a
lot, significantly anyway. But that's basically almost all because
fewer people are looking for work.

AMANPOUR: So where is it headed in terms of the people looking
for work?

KRUGMAN: Well, it's still terrible. It's still a terrible job
market. It's not deteriorating. But it's still a very -- there's
still about five times as many people looking for jobs as there are
job openings. And it's still -- the length, the average duration of
unemployment hit a new record.

So we're in a situation where, you know, things are not getting
worse, or at least not getting worse in all dimensions anymore.

AMANPOUR: So is that good news? It's not getting worse.

GEORGE WILL, THE WASHINGTON POST: Well, it's not getting worse.
Actually, the good news within the news is that there are 14,000 fewer
people working for government in the United States as state and local
governments shed jobs.

But a corollary of what Paul just said is that when the economy
picks up and people become encouraged to go back into seeking jobs,
you could have the economy rising and unemployment rising
simultaneously.

We lost more jobs in this great recession than the last four
recessions combined. Now we have had, for 28 months, essentially zero
interest rates. The quantitative easing, the printing of money that
began in November, under this the Fed -- the Federal Reserve Board has
been buying 70 percent of the new issues of Treasury debt. That ends
in June.

That probably distresses Paul.

KRUGMAN: Yes, I would just say that the aftermath of a terrible
financial crisis, and this was the worst financial crisis since the
1930s, is always a prolonged period of weak growth. And the tragedy
is that Washington has given up on the jobs picture.

It's not that -- it's not a failure of policy. I think the
policies that we have undertaken made things less bad than they would
have been. But here we are with still terrible unemployment rate, 37
weeks the average unemployed person is unemployed. And no interest in
Washington about doing anything to create jobs.

AMANPOUR: So we were just speaking to Senators Sessions and
Schumer. Did you hear anything from them that would lead to a
slightly less grim outlook?

IGNATIUS: Only that you heard a reluctance on both sides to take
the budget showdown off the edge of a cliff. I didn't hear much
enthusiasm for a shutdown from Senator Sessions on the Republican
side.

I think what's excited the White House about these numbers is not
the unemployment number per se, because as Paul says, there are all
sorts of complicated factors that go into that, but the job growth
number. And it does look as if the economy is finally beginning to
generate jobs in the numbers that over time, would bring the
unemployment rate down and would get you back on a trajectory of more
normal growth. We're not there yet. But I think people see, you
know, a light at the end of the tunnel, you can say, they at least see
the tunnel.

CLARKE: I think the good thing from the two senators is neither
one of them tried to score huge political points one way or the other,
which is kind of the norm, and I thought was very responsible and
even-handed, which is good.

But here's the failure of policy, I think. What will really get
the private sector humming and hiring a lot of people is if they have
predictability and certainty about things like regulatory regimes and
are some of these trade agreements going to go through that we really
need? Because it is a global picture, not just a domestic one.

And I know there's a lot going on, but nobody seems to be
focusing on that, not the administration, not Congress. And Paul is
laughing.

KRUGMAN: Because that's not -- the reason businesses are not
investing is they have tons and tons of excess capacity. There's a
very clear relationship historically between the amount of
unemployment and the amount of business investment. When unemployment
is high, when capacity is low, investment is low. There's nothing --
all of this stuff about uncertainty is just a myth being made up to
blame this on Obama.

(CROSSTALK)

CLARKE: No, it's not. Money is a coward. Money is a coward.
It's not going to go unless it knows it can make money.

AMANPOUR: Torie mentioned reform. And tax reform is one of
them. I mean, it looks like this week, there was this whole issue
with Jeffrey Immelt, the president's adviser, and you know, allegedly
paying actually no tax on having made billions of dollars in profit,
the company. It was OK. He took advantage of the system. But is it
right? Does that need to be conformed (ph)? GE?

WILL: It's an old axiom that what is alarming in Washington is
not what's done that is illegal but what is done that's legal. No one
is accusing GE of doing anything other than taking advantage of the
baroque tax code that we have produced over time. Mitch Daniels, the
governor of Indiana, says, wouldn't it be wonderful if we had a tax
code that looks as though someone designed it on purpose? They
designed a tax code that has produced the following interesting
number. According to Investors Business Daily, 975 people work in the
tax department of GE, just trying to mine the tax code for advantage.

AMANPOUR: That's true (ph), but it doesn't look good, though,
does it? The optics of this?

KRUGMAN: No, I have to say that Obama has got a pretty bad
record now. He picked Alan Simpson to co-head the debt commission,
which turned out to be given to making some rather strange remarks.
As his adviser on the economy, he managed to pick the head of a
corporation that is managing not to pay any taxes.

And look, we do need tax reform. But the biggest obstacle to tax
reform right now is that any reasonable tax reform is going to raise
taxes on some people. Because you're going to close some loopholes.
And what we have is the right wing of the Republican Party, the Grover
Norquist types saying, no taxes on anybody should ever go up. And we
can't have a tax reform that consists solely of cutting taxes. We
have to have one that levels the taxes. So at the moment, tax reform
is just not on the agenda, realistically, because we have no agreement
on that.

AMANPOUR: Do you think President Obama is as involved in, for
instance, the budget battles that are going on in Congress as you
would like to see him?

IGNATIUS: In classic Obama fashion, he's involved but tries to
conceal his hand. He's the most reticent chief executive I can
remember. For example yesterday, Saturday, he was on the phone both
to John Boehner, the House speaker, and to Harry Reid, the Senate
majority leader, trying to talk about the details of the compromise
they hope will be coming this week.

On the question that Paul is raising, whether we're ever going to
get to the point where we're seriously talking about tax
simplification, tax changes that would lead to better budget balance
and reductions in the deficits that worry everybody, I think this
White House is getting ready for a process. And I think it could
actually come quite soon. By June, July, in which the White House,
which has been reticent, silent on all of this, will begin to roll out
some ideas similar to those that were in the Simpson-Bowles deficit
commission. And I think we could have this summer a big and a very
important debate on how to get these numbers better.

AMANPOUR: One thing we didn't get to talk about with the
senators was the really big cuts or the big reforms that have to be
made in entitlements. And also on the Pentagon. Where do you think
can big cuts be made in the Pentagon budget?

CLARKE: Oh, man. It's like the morbidly obese patient that's
almost, where do you start? It really is. And God bless anyone,
Rumsfeld, Gates and others who are trying. It's very, very hard.
They have made some significant cuts. And there is plenty, plenty of
waste in that place. Any time you have 2 or 3 million employees,
depends on how you count them, there's a lot of waste.

But that wouldn't be the first place I would start. Most people
would argue that's not the one that is going to make a big difference.
And whether or not these folks up the street are really serious is if
they tackle the major, major entitlement programs.

Republicans say they are going to. It has yet to be seen.

AMANPOUR: Hold that thought and we'll continue. With the
world's eyes on Libya, Afghanistan explodes anew with rage and murder
in the streets there. How can the United States extinguish a fuse
that's been lit by that renegade Florida pastor who took it upon
himself to burn a Koran? We'll have that with our roundtable when we
come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Should you bear any responsibility for
inciting today's horrific actions?

TERRY JONES: We do not feel responsible, no. We feel more that
the Muslims and the radical element of Islam, they used that as an
excuse.

STAFFAN DE MISTURA, CHIEF OF UN ASSISTANCE MISSION IN
AFGHANISTAN: I would tell him my three colleagues have died, and
seven all together have died. We are very good people and we're
working hard. So you should be feeling guilty and should not do that.

(END VIDEO CLIP)

AMANPOUR: That was Staffan de Mistura, chief of the U.N.
assistance mission in Afghanistan right there talking and weighing in
on pastor Terry Jones, who decided to burn a Koran. That act, as
we've been telling you, has set off a tidal wave of anger and violence
in Afghanistan. Pastor Jones of the ironically named Dove World
Outreach Center is unrepentant and unbowed. And still a huge headache
for the Obama administration.

So let's bring that subject back to our roundtable. Let me ask
you, David Ignatius, is this a one-time horrible thing or is this
something that's going to have a lingering effect in Afghanistan right
now? And to the detriment of the Americans?

IGNATIUS: Sadly, this incident of people protesting and killing
people because of anger at the burning of Korans, but it's really
anger at what they see as a United States that doesn't respect their
religion, it recurs in Afghanistan and Pakistan so often. I think
they are irresponsible actions by pastor Jones and by the Muslim
sheikhs who on Friday prayers incited people, but the larger point is
that deep into a war where we -- our strategy is counterinsurgency, to
get the population with us and working with us to fight against the
Taliban, you see what angry, anti-American feeling is out there. Even
in areas that are remote from the fighting like Mazar-e Sharif in the
north -- that is where the 12 U.N. people were killed. That's far
from the battlefield. So that's what worries me.

AMANPOUR: Torie, what should the administration be doing to win
back some of these hearts and minds?

CLARKE: It is going to be very, very hard. Right or wrong, they
take it as a sign, an excuse, and a reason to go after the United
States.

AMANPOUR: General Petraeus came out strongly today,
categorically blaming the pastor and basically saying this is not
representative of the U.S.

CLARKE: And I know extraordinary people at extraordinary levels
have talked to him before saying it is needlessly provocative. Yes,
in this country you can talk about freedom of speech, but you cannot
do this and underestimate the consequences it can have around the
world.

There was no need to do this. But I think it will take a long
time to repair these sorts of things. Fairly or unfairly, it will
take a long time to repair them.

AMANPOUR: And here we are, two weeks into Libya now, which some
people are calling a war others aren't. Are you calling it a war?

WILL: Of course it's a war. War planes flown by warriors doing
what war looks like, which is dropping bombs.

AMANPOUR: Did the president convince you in his speech on Monday
that this was in the vital national interests? It had a limited goal,
limited duration?

WILL: What he said in his speech was broadening our military
mission to include regime change would be a mistake. If so, we're
making it.

It's perfectly clear that we who worried about mission creep got
it wrong. It was mission gallop. Weeks ago when the president said
this would be matter of days not weeks. He said, also, we were told
there would be no boots on the ground. Well there may not be boots,
there are certainly shoes on the ground now.

AMANPOUR: The CIA?

WILL: They're occupied by CIA people, because like it or not,
the logic of events says that this is a failure if Gadhafi survives.
Some of us worry that, even worse than the failure would be the
success, because it is going to whet the appetite of humanitarian
imperialists for more of these interventions.
AMANPOUR: Well, General Jones was telling me that it was a risk,
one way or the other, whether Gadhafi stays or goes, mostly because we
don't know the rebels.

A lot has been made of the end game. George just rightly
mentioned that the president said regime change was not the goal, but
the president also says that Gadhafi has to go. So where are we here?

KRUGMAN: This is clear. I actually have a lot of sympathy for
the president on this. It's clearly -- this was not like Iraq. This
was not a gung-ho president who wanted to win himself some military
glory. There is going to be no landings on aircraft carriers for this
one, right? This was something where he was dragged in. He was
dragged in by the spectacle of a looming humanitarian disaster.

And it's very, very hard -- it's hard both directions. I think
if you actually look at the people like me who are very opposed to
Iraq, we're actually very divided. And in many cases divided within
ourselves, as I am. But this is -- this was not easy. Of course
there's no clear end game. This was something where pulled in by
events.

I think the president's speech wasn't very effective because I'm
pretty sure he's internally divided too. But I think that's to his
credit.

CLARKE: Wow. Maxwell Taylor, who President Kennedy brought back
to look at Vietnam did this amazing speech in which he said, when you
look at these things, the commitment of forces, you better be able to
explain to the man in the street in a simple sentence or two what
you're trying to accomplish.

I could pick 500 people off the street and say what are we trying
to get done in Libya? They would not be able to answer that question.
I don't know what the answer to that question is.

AMANPOUR: One of your former colleagues in the Bush
administration, Megan Sullivan, has just written an op-ed...

CLARKE: Smart piece.

AMANPOUR: ...saying that it could be Obama's Iraq. I mean, is
that completely fantastical or is that possible?

(CROSSTALK)

CLARKE: I think, with all due respect for all these brilliant
people sitting around the table, I think anybody that says they know
is either stupid or lying. We don't know.

AMANPOUR: David?

CLARKE: You're either going to be stupid or lying. So go ahead.

IGNATIUS: The unknowns are scary. Secretary of Defense Gates
said to me and then on your show, I think, the shows -- this is dark
territory. We don't see what is down there. I think there's reason
not to worry this is spinning off to an Iraq. There are not the tens
of thousands of troops on the ground.

AMANPOUR: Do you think Gadhafi will go?

IGNATIUS: I think the White House strategy today is to seek what
one person described to me as regime implosion. And that is
happening. This regime that requires cash to survive. The cash
basically is cut off. This is a regime that has a small inner circle
of people close to Gadhafi. One by one, they're leaving.
They're going to London. They're defecting to Egypt.

AMANPOUR: Well, really two biggies.

IGNATIUS: Well, there are more on the way. I have been told
another senior cabinet minister has already made his deal and will be
out soon.

The point is we're picking off elements around Gadhafi. The hope
is that he'll end up as the mayor of Tripoli. Is that a realistic
hope? Hard to say, but it's not -- I wouldn't rule that out as
impossible.

AMANPOUR: Or a safe area around Benghazi for maybe 12 years like
we had with Saddam Hussein in Kuwait -- in Iraq rather.

KRUGMAN: Well, the parallel with the Kurdish protection after
the first Gulf war is a better parallel. And that was not ideal, but
it was not such a terrible thing either.

AMANPOUR: We have to go. Everybody, thank you very much. And
this conversation continues in the Green Room. You can watch at
abcnews.com/thisweek.

And up next, we'll give you a tax season warning as we look at
the week ahead on ABC News. Electronic thieves may be after your
refunds.

(COMMERCIAL BREAK)

AMANPOUR: And now here's a preview of what else you can expect
coming up on ABC News.

(BEGIN VIDEOTAPE)

AMANPOUR: Tomorrow, on Good Morning America, Bill Clinton takes
a break from his globetrotting to talk about what he's been up to
recently and why.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: And I
wanted to come here and see this.

AMANPOUR: The former president with a full plate on Monday's
GMA.

On World News a new nightmare on top of the old. Getting your
taxes done is bad enough, but now there are crooks involved.

UNIDENTIFIED FEMALE; I went into a panic. I went into an
absolute panic.

AMANPOUR: Someone stole her identity in order to steal her
refund. What to watch out for on World News.

(END VIDEOTAPE)

AMANPOUR: Nightline will closely focusing on Libya over the next
several days. And I'll following developments with you on Twitter, my
Facebook page and on ABCnews.com. I'll see you online and here again
next Sunday on This Week. Thank you for joining us.